Group NBT, which ensures that companies own their domain names, has recommended the 550p a share offer to its shareholders. The deal has already secured support from the group’s top four investors who own 33 per cent of the company.

The offer represents a 22.5 per cent premium to the closing share price on Thursday.

Analysts said the premium looked fair given that the sector is likely to grow significantly in the the coming years, as companies become increasingly aware of the importance of managing their online presence.

Interest in the sector has been particularly high since news in June that Icann, the body that overseas the internet’s addressing system, is to pave the way for thousands of new web addresses that will have to be managed by companies such as Group NBT.

From next year, companies can apply to create their own customised internet domain names, such as .apple or .bmw.

“The premium offered looks acceptable in the current climate,” said Ian McInally, analyst at Cenkos Securities. Some analysts argued that Group NBT could have held out for a slightly better offer.

The company is one of the European market leaders in web domain name management thanks to a number of acquisitions made in the past five years. The Aim-traded company acquired France’s Indom in 2010 and Ascio Technologies in 2007.

Geoff Wicks, chief executive of Group NBT, said going private would allow the company to make even more acquisitions, because it would free them from the burden of having to maintain steady year-on-year profit growth.

“Our competitors should be really worried by this deal if it goes through, as it will allow us be much more aggressive,” said Mr Wicks.

The offer, which was made through Newton Bidco, an investment vehicle owned by Hg Capital, was announced as the target reported a 1 per cent rise in pre-tax profit to £7.2m for the year to June 30. Revenues rose 13 per cent to £49.5m.

The fastest-growing area of Group NBT was its brand protection arm, which specialises in getting counterfeit websites taken off the internet.

Mr Wicks said he would stay on as chief executive after the takeover to see the company through the transition, but will then retire within 18 months.

He took over the job in 2001 after the dotcom crash that dragged the company’s share price down from a high of £21 to 26p in less than a year. In the last decade he focused the company away from providing domain names and hosting websites towards web domain name management. Hg Capital said it would not borrow to fund the deal.